The Pakistan Stock Exchange (PSX) surged to historic levels on Thursday, with the benchmark KSE-100 index closing just shy of the 160,000 milestone. The strong rally reflected renewed investor confidence, fueled by the International Monetary Fund’s (IMF) ongoing review of Pakistan’s $7 billion Extended Fund Facility (EFF) and key government measures aimed at stabilizing the power sector and broader economy.
The KSE-100 ended the session at 159,208 points, marking a gain of 1,043 points or 0.66 percent. During intraday trading, the index briefly touched 159,538, highlighting the bullish momentum that has characterized the market in recent sessions. Investor optimism was driven by a combination of policy decisions, international developments, and sector-specific tailwinds that positioned the exchange for record-breaking performance.
One of the central drivers of the rally was the government’s recently concluded agreement with a consortium of 18 banks to refinance Rs1.2 trillion in loans for the power sector. Structured at a Kibor rate minus 0.9 percent, the refinancing is expected to cut sector costs by 1.5 to 5 percent, significantly improving the outlook for energy-related stocks. While the deal represents a lifeline for the power sector, its long-term burden will be carried by consumers, who will face a Rs3.23 per unit surcharge spread over six years.
Electricity reforms were not the only policy measure shaping market sentiment. The government also approved the commercial import of used vehicles, a step linked to IMF conditions that reflects Pakistan’s commitment to trade liberalization. For investors, these actions signaled an alignment with international financial requirements, bolstering confidence in Pakistan’s economic management at a critical juncture.
Energy and financial sector stocks were the standout performers of the day. Hub Power, Engro Holdings, Mari Energies, Engro Fertiliser, and Habib Bank collectively added 1,145 points to the index. However, profit-taking in heavyweight stocks such as Lucky Cement, Oil and Gas Development Company, and United Bank limited the overall rally, pulling back gains by 325 points.
Trading activity remained relatively subdued in terms of volume, with shares traded falling 6.03 percent to 1.67 billion. Despite the decline in volume, the traded value rose by 1.38 percent to Rs55.2 billion, suggesting that investors were focusing on high-value transactions. K-Electric emerged as the most actively traded stock of the session, with 406 million shares changing hands.
Ali Najib, Deputy Head of Trading at Arif Habib Ltd., noted that the refinancing agreement provided much-needed relief for energy stocks, sparking a wave of buying interest across the board. He emphasized that the deal’s cost reduction mechanism would strengthen earnings potential in the sector, providing a major boost to investor sentiment.
Market optimism was further buoyed by diplomatic developments, particularly anticipation of Prime Minister Shehbaz Sharif’s upcoming meeting with US President Donald Trump. The engagement is being viewed as a potential step toward improving bilateral relations, with possible implications for economic and trade cooperation.
Analysts now expect the PSX to cross the 160,000 threshold in the coming sessions, marking a symbolic milestone for the exchange. With strong momentum, favorable policy moves, and international backing through the IMF program, the outlook for Pakistan’s capital markets remains robust in the near term.
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